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Chancellor Angela Merkel struck a last-minute deal with her left-wing rivals on Friday to build a new coalition government that would limit migration to Germany to prevent a re-run of the 2015 refugee crisis.

Mrs Merkel’s conservatives and former coalition Social Democrats signed a 28-page deal that forms the basis for the talks with agreements on issues including migration and the ending of arms sales to countries involved in the Yemen war.

The protracted talks to strike a coalition deal are unusual in Germany and followed breakthrough electoral success for the right-wing Alternative for Germany, which criticised Mrs Merkel’s handling of the refugee crisis.

Over the last three years, more refugees have arrived in Germany than anywhere else in Europe. Under the deal struck between the two parties, the numbers of people allowed to join their family living as refugees would be capped at 1,000.

A government commission would look at Germany’s ability to integrate migrants. Germany will also promote a joint European asylum system that fairly distributes people in need of protection around the continent.

The deal eased months of uncertainty that raised questions about her political future and threatened the political standing of Europe’s predominant economic power.

Weakened by an election setback in September, Merkel turned to the left-leaning SPD to renew their grand coalition after the collapse in November of talks on a three-way coalition with the Greens and Free Democrats (FDP).

"We have felt since the elections that the world will not wait for us, and in particular regarding Europe we are convinced we need a new call for Europe," Merkel, who has played a central role in tackling crises over the euro and refugees, told journalists after talks that had run through the night.

The deal to revive the grand coalition that has governed since 2013 must be approved by SPD party members at a congress in nine days.

"There will be difficult tasks to come," said Mrs Merkel, who has been eager to avoid new elections or running a minority government. "The coalition negotiations probably won't be easier than the exploratory talks."

A Merkel ally said that a government could be in place by March or April. As Europe's largest economy and pre-eminent power broker, Germany is crucial to the region's fortunes. Berlin's partners are eagerly awaiting a new government to help drive forward Brexit talks, euro zone reform and EU diplomatic initiatives.

European Commission President Jean-Claude Juncker, speaking in Sofia, described the deal as a huge benefit for Europe.

They would also rein in progress in EU accession talks with Turkey. The euro climbed to a three-year high after news of the breakthrough in the talks.

Chancellor Angela Merkel struck a last-minute deal with her left-wing rivals on Friday to build a new coalition government that would limit migration to Germany to prevent a re-run of the 2015 refugee crisis.

Mrs Merkel’s conservatives and former coalition Social Democrats signed a 28-page deal that forms the basis for the talks with agreements on issues including migration and the ending of arms sales to countries involved in the Yemen war.

The protracted talks to strike a coalition deal are unusual in Germany and followed breakthrough electoral success for the right-wing Alternative for Germany, which criticised Mrs Merkel’s handling of the refugee crisis.

Over the last three years, more refugees have arrived in Germany than anywhere else in Europe. Under the deal struck between the two parties, the numbers of people allowed to join their family living as refugees would be capped at 1,000.

A government commission would look at Germany’s ability to integrate migrants. Germany will also promote a joint European asylum system that fairly distributes people in need of protection around the continent.

The deal eased months of uncertainty that raised questions about her political future and threatened the political standing of Europe’s predominant economic power.

Weakened by an election setback in September, Merkel turned to the left-leaning SPD to renew their grand coalition after the collapse in November of talks on a three-way coalition with the Greens and Free Democrats (FDP).

"We have felt since the elections that the world will not wait for us, and in particular regarding Europe we are convinced we need a new call for Europe," Merkel, who has played a central role in tackling crises over the euro and refugees, told journalists after talks that had run through the night.

The deal to revive the grand coalition that has governed since 2013 must be approved by SPD party members at a congress in nine days.

"There will be difficult tasks to come," said Mrs Merkel, who has been eager to avoid new elections or running a minority government. "The coalition negotiations probably won't be easier than the exploratory talks."

A Merkel ally said that a government could be in place by March or April. As Europe's largest economy and pre-eminent power broker, Germany is crucial to the region's fortunes. Berlin's partners are eagerly awaiting a new government to help drive forward Brexit talks, euro zone reform and EU diplomatic initiatives.

European Commission President Jean-Claude Juncker, speaking in Sofia, described the deal as a huge benefit for Europe.

They would also rein in progress in EU accession talks with Turkey. The euro climbed to a three-year high after news of the breakthrough in the talks.